EXCLUSIVE: Google Revenue Projections For New Ad Exchange Leak

The figures have changed a lot as launch day neared, but we understand Google's internal revenue projections for the ad exchange it launched today are around $400 million of top-line revenue on an annualized basis.

For Google (GOOG), that's tiny.

It's hard to scoff at $400 million, but the figure is gross media dollars, of which Google only keeps a 20% to 30% cut.

Google's actual take isn't that big -- certainly not compared to its ~$25 billion overall revenues.

And the Google Ad Exchange is unlikely move the needle for quite some time.

Optimistic analysts project the non-premium display market could reach $10 billion in five years. Say -- again, optimistically -- ad exchanges take half that. Microsoft and Yahoo are opening ad exchanges, so it's unlikely Google will be able to control 80% of that market like it does in search. Generously, let's assume Google takes a 50% share -- $2.5 billion. Even then, the Google Ad Exchange's net revenues will hover around $300 million to $500 million.

Don't get the message wrong here. $500 million in net revenue is a lot of money -- for most businesses. It's more than double the net revenues DoubleClick ever earned off its exchanges.

But Google isn't most businesses.

The Google Ad Exchange probably won't be a failure. But even internally, no one expects it to be huge, either. Internally, people wonder if Google will stick with a business that offers so little impact on its bottom line. When things are going well, huge companies like Google tend to diversify into new businesses. But when things go badly, those businesses can suddenly become very distant priorities.